Negotiations on a new coronavirus economic package are intensifying in Washington this week, as Joe Biden seeks to achieve his first major policy win since taking office.
The US president was due to host a group of Republicans at the White House on Monday night for discussions on a package, after a group of 10 Republicans unveiled a $600 billion (€500 billion) proposal – much lower than the $1.9 trillion preferred by Mr Biden.
Mr Biden was due to meet the group, led by Senator Susan Collins of Maine, in a signal he is committed to working across the political aisle – a key promise of his election campaign.
But the new president also runs the risk of alienating members of his own party, particularly those on the left, who are seeking a bolder response to the coronavirus crisis given that the Democrats control both houses of Congress and the White House.
Senior Democrats on Capitol Hill, including House of Representatives speaker Nancy Pelosi, have indicated they may move forward with the budget reconciliation process – a procedural tool that allows certain financial legislation to be passed with only a simple majority in the Senate, rather than the 60 votes required for most legislation in the 100-seat upper chamber.
Negotiating process
However, Mr Biden is exploring ways in which his economic package could be passed with the help of Republicans in the Senate, as he tries to secure a bipartisan deal. Significantly, the Republicans’ counter-proposal is supported by 10 moderate Republican senators – the number needed to join forces with Democrats to pass the legislation without invoking the budget reconciliation process.
Speaking ahead of the meeting on Monday, White House press secretary Jen Psaki stressed this was only the first stage in the negotiating process.
“We saw this as a good faith proposal they’ve put forward, a good faith effort to have a discussion,” she said of the Republican $600 billion plan. “The president is inviting them here in good faith, and we will see where it goes from here.” Mr Biden said on Friday that a coronavirus relief Bill had to pass “with no ifs, ands or buts”.
Among the differences in the two plans is Republican resistance to the $1,400 stimulus cheques Mr Biden is proposing for Americans. Republicans favour a lower figure of $1,000, which would be offered only to Americans earning below a certain threshold. Similarly, they favour less support for local and state authorities to deal with the pandemic.
Relief and vaccinations
The promise to raise the federal minimum wage, supported by figures such as Senator Bernie Sanders, who leads the budget committee, is unlikely to secure buy-in from Republicans, and possibly could be hived off from the coronavirus package.
Mr Biden has promised an ambitious relief package to accompany his Covid-19 vaccination plan, which is aiming to achieve 100 million vaccinations in his first 100 days in office.
Treasury secretary Janet Yellen urged Congress during her Senate confirmation hearing to "act big" as it considers the first major legislative proposal of the Biden presidency, arguing that interest rates are at historic lows. It is a message she repeated on Twitter on Sunday. "The benefits of acting now – and acting big – will far outweigh the costs in the long run," she said.
However, calls for an expansive spending package were undermined somewhat by a new report by the Congressional Budget Office released on Monday, which predicts that the American economy will return to its pre-pandemic size by the middle of this year, even without further federal aid. The study by the non-partisan advisory group expects unemployment to fall to 5.3 per cent at the end of the year, down from 8.4 per cent projected last July.
